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Why the Cure for a Sluggish Economy Is Actually Longer Vacations
- bunnymancer 11y agoGive people more time to invest in things they'll have to spend money on and they will spend more money? Who'd have thunk. Not gonna buy a boat for 10 vacation days total per year.. Why would I? 25 days on the other hand.. That's a solid three extra weeks of boating. Might buy a boat.
- sageabilly 11y agoThat's (surprisingly, to me) not the main point of the article- the point is that if more people take more vacation time then companies will have to hire more employees to ensure the same level of base coverage and voila job creation!
- vkou 11y agoA shorter working week would accomplish something similar. You can phase it in by mandating OT pay for hourly employees after 40h, then 35h, then 30h. Eventually, salaried jobs will catch up.
- briandear 11y agoHave we not learned anything from France? That was the exact same argument made for the 35 hour workweek and it had no positive effect on unemployment rates. It's a ridiculous idea. We have unemployment chronically above 10% both with a 35 hour week and generous vacation and leave.
- vkou 11y agoWould you have less unemployment with a 40 hour work week? An 80 hour work week?
- marcosdumay 11y agoI could imagine why that would be the case. The more important question is, how are similar countries that didn't adopt the 35 hour week doing?
- mikeyouse 11y agoWould it surprise you to learn that France has a much higher employed proportion of their population than the US? http://i.imgur.com/g9NA76s.png http://i.imgur.com/g9NA76s.png An extra 5% of working age employment in the US would mean something like 7M more jobs.
- briandear 11y agoWho pays for that vacation? France has very generous vacation and their economy is stagnant. They even have a 35 hour workweek established based in the same premise. It hasn't worked. The economy is growing less than under Sarkozy. We could also make the argument that cutting taxes would spur more spending. If you increase my disposable income, I'll buy some new studio monitors and an Allen & Heath mixer. Just increasing vacation time results in a higher labor cost and thus raises prices, negating the benefit.
- a_c_s 11y agoFrance's 'standard of living' (measured in material goods) is quite high globally-speaking and not significantly lower than that of the USA. If you include intangibles like quality healthcare and reasonable amounts of vacation time, then I'd argue that France is far wealthier than the US.
- SixSigma 11y agoThose simple minded fools with their 35 hour work week, healthcare, paternity leave and 30 days holiday ! Who are they fooling? Not me, I'm going to buy some expensive speakers
- jpapon 11y agoGermany also has very generous vacation, 12 months of paternity/maternity leave, etc... and their economy is doing just fine. I guarantee if you asked Americans if they would trade their 2.5% (or whatever) economic growth for Germany's 1% in exchange for 20 days guaranteed vacation per year, most would say "hell yes". The people who wouldn't take the trade are those rich enough to not need the vacation.
- s73v3r 11y agoIt has not been shown that higher labor costs raise prices a significant amount. During the debate over Seattle raising wages, it was shown that increased wages would add very little to the cost of fast food meals.
- wnevets 11y agoA better example could be more vacation should lower stress induced health problems, which could mean lower premiums and less money going into the black hole that is the US healthcare system.
- sageabilly 11y ago"The story of secular stagnation is that we have too little demand to keep the economy and the workforce fully employed." The standing assumption here is that it is obviously Right and Good for everyone to have a job and work and that the Government must, at all costs, do everything in its power to create jobs so that everyone can work. However, not everyone wants to do traditional work- some want to be caretakers to their family, some want to pursue alternative lifestyles such as homesteading, and yeah some just want to be supremely lazy. Assuming that it is always ultimately Right and Good to have jobs for everyone regardless of inclination and ability leads to crazy finagling to "create" jobs and to never even consider eliminating jobs by any means (such as dismantling Government agencies that have been shown to be completely useless cough cough TSA cough cough). Personally, I think having a base income for everyone in the US would boost the economy way more than job creation and assuming everyone should work. Eliminating homelessness, poverty, and hunger would ensure that every person in society lived at a high basic level of existence and would free up time, effort, and money that is currently tied up in serving the poor, hungry, and homeless. However, I cannot see that ever becoming a reality in the US so the point is probably moot.
- sologoub 11y agoThe basic income would also enable government to tune the economy better - want more demand? Send out more money! However, I do think we can implement better short-term policy as well, with proper maternity/paternity/care leaves and longer overall vacations. Germany and other advanced economies have done so and have clear benefits. We can also improve the tax write offs for dependents, to make one parent staying home longer an option not just for those either really well of or really poor, but for most families.
- pluckytree 11y agoI thought they were going to present a case that vacation increases overall employee productivity over the long run, which would have been a lot more interesting. I’d rather see more research into productivity and vacation as well as more education so companies realize they can get more bang for the buck just by changing how they treat employee downtime. Having government come in and force companies to pay more in wages overall doesn’t seem like the best idea. Many companies, especially young companies struggle to keep their head above water and even small changes in wages can push them into closing up shop. There is no discussion in this article about any potential negative consquences. Magically, we’ll increase every company’s expenses and they will hire more people and no company will fold because of it. This is not a realistic scenario they are presenting.
- briandear 11y agoThe productivity aspect is most interesting to me. Otherwise it's a financial loss as increased vacation raises costs; the work still has to be done. If the productivity gain offsets the cost, then it's definitely an idea to explore.
- guard-of-terra 11y agoFinancial loss to whom? Productivity is not just what people do. It's mostly about the economical environment around them. Same number of similarly-capable people will have one productivity in SV, other productivity in China, entirely third one in Kenya. There all "kinds" of work around us. Maybe you get access to better work that far outweights the tiny decrease of time you dedicate to it.
- a3n 11y agoIs there an aggregate Laffer-like curve for wages vs return to society and the economy. For example, for one of the companies in that aggregate, how high a wage can they pay and still get positive "returns" in the society and economy that they operate in. But aggregate, so everyone. Similar for the least aggregate wages can be before the overall economy is not healthy.
- roymurdock 11y agoThis is wrong. Here is the author's main point: Policies aimed at shortening work hours can have a dramatic impact on imbalance of supply and demand. If the amount of vacation time is increased an average of one week a year, this amounts to a two percent reduction in supply of labor. Government-mandated longer vacations are not actually reducing the supply of labor. It doesn't make people disappear. It just makes them work harder for the rest of the year to make up for the extra week of vacation. Combine that with stagnant demand (no rises in income = less consumption and also less tax money = less govt spending) and you haven't solved anything. The real cure for a sluggish economy is a large-scale, man-fought war (barring any kind of nuclear event). War simultaneously boosts demand as the government ramps up spend across a bevy of sectors (industrial, aerospace, medical, food, science, tech) and the labor force decreases for obvious reasons. Longer vacation is a much nicer and more politically correct thesis though.
- guard-of-terra 11y agoGiven more vacations: Why do you assume that people who work hard already will work even harder? Why do you assume that people who slack at work will work any harder? Remember, people compete with each other, so do companies. They're not trying to hit some predetermined level of yearly productivity. If you give vacations to everybody, they'll actually spend some off time, that's that. This was actually tried. In Russia a full week of vacations was introduced, around the New Year. Did people start working harder? No. Did anything collapse? No.
- warfangle 11y ago> The real cure for a sluggish economy is a large-scale, man-fought war Only if you win, and only if nobody is actually fighting you on your soil. The only reason the USA is such a superpower now is because literally everyone else involved had their infrastructure decimated.
- roymurdock 11y agoThe US has major geographical and natural resource advantages that make it a superpower. We fared well after WW2 for a number of reasons, not just because we lost no infrastructure and relatively few soldiers. Look at Japan, Germany, the UK, and France now. They were devastated (both infrastructure and population-wise) and now they are among the strongest economies in the world, coming in behind the US and China at numbers 3,4,5,6 respectively in terms of nominal GDP. Just as forest fires burn down old trees and put nutrients back into the soil to spur new growth, so does war force countries to rebuild and rethink. I'm not advocating for war, but it's a much more defensible thesis in my opinion (large temporary increase in aggregate demand, large permanent decrease in labor supply), much more so than increased vacation time.
- keenerd 11y agoOfftopic, but what is the CSS trick they are using to handle zoom? I've got JS disabled and when I zoom the page the spammy sidebars vanish. I am not familiar with this and it references 18 CSS files, making it tedious to dig through the source.
- ThrustVectoring 11y agoChrome's inspect element found a `.span2.hidden-phone.hidden-table` element, which is styled with a media query from a CSS file called `bootstrap-responsive.css`.
- keenerd 11y agoThanks, that made it much easier to drill down. Specifically there is @media (max-width: 701px) { ... } @media (min-width: 700px) and (max-width: 1100px) { ... } And that toggles the visibility of some classes. I didn't realize CSS3 supported that sort of logic. Guess I shouldn't have been surprised given the Turing Completeness proof...
- Apocryphon 11y agoJust read the original source, it's linked at the top: http://www.pbs.org/newshour/making-sense/column-can-cure-economic-woes-longer-vacations/ http://www.pbs.org/newshour/making-sense/column-can-cure-eco...
- shaftoe 11y agoSo, instead of increasing demand we decrease supply by having people work and thus produce less? Simplifying that, we will gain more by producing less?
- dibujante 11y agoNo, this is basically just a way of increasing headcount without increasing production. They're basically arguing that e.g. instead of 10 workers producing 10 widgets, you have 12 workers produce 10 widgets with each of them taking more vacation. Labour costs go up, some more wealth gets shifted back to labour, and this increases aggregate demand without changing supply.
- AnimalMuppet 11y agoBut it never works like that. If I have a company, I'll hire as many people as can produce more for me than they cost me. If you reduce the amount they can produce, that means that I will hire fewer people - not because I'm evil and manipulative, but because that's the way the economics works out for me, the employer.
- maxxxxx 11y agoIf they still produce more than they cost you, then you should hire more people. There certainly is a threshold where people become too expensive but the questions is when this is reached. looking at sky high corporate profits these days I think people produce much more more value than they are being paid.
- rrggrr 11y agoThis is maddeningly wrong. Case in point: The US Small Business Administration approved $19b in loans to small business in 2014, or less than half what the Obama Administration loaned just one company - General Motors. This is less than 1% of the increase in US depository institution (Bank) excess reserves since 2011. The SBA 2014 amounts are only half what the US provides in foreign aid to other countries. It represents only .25% of the total value of QE2. The US can only claim it is serious about economic recovery when it redirects its misguided intervention into its economy, to the sector that creates the most jobs and individual wealth - small business. Until then all the liquidity the USGOV and Fed has and continues to manufacture will be sequestered in large company balance sheets, in offshore tax havens, and on bank balance sheets typically on deposit at the Fed. Insanity.
- clock_tower 11y agoWhat about adjusting employee exempt status for inflation? At present, if you're paid a salary of more than $23,660 per year, your employer isn't required to pay overtime; raising this to a sane figure ($70,000?) would create a lot of jobs and improve quality of life for employees; I think there was a discussion of this on HN last year.
- dragonwriter 11y ago> What about adjusting employee exempt status for inflation? At present, if you're paid a salary of more than $23,660 per year, your employer isn't required to pay overtime; That's only true in certain exemptions, such as the computer-related occupation exemption and the executive/administrative/professional exemption. FLSA exemptions have either both a kind-of-work and pay qualification (as for the computer occupations exemption), or just a kind-of-work qualification (as in the motor carrier exemption), none have just a pay qualification. > raising this to a sane figure ($70,000?) would create a lot of jobs and improve quality of life for employees Alternatively, it would eliminate a lot of the jobs in the covered areas that are currently paid less than the new threshold. (I tend to think it would be a net win overall, but it wouldn't be one sided in its effects.)
- clock_tower 11y agoI hadn't known about the kind-of-work exemption -- although some things I've read pointed out the "executive" issue relating to classifications of managers. As for whether it would eliminate or increase number of jobs of a given type, that depends on how many companies could afford to pay their employees better while still having sustainable business models; I'm not equipped to say how many would.